Grocery giant Kroger Company has released a list of hundreds of stores it plans to offload to gain approval for its merger with Albertsons. http://f-st.co/9YgusDf
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ARE KROGER AND ALBERTSONS DIVESTITURES ENOUGH TO GET MERGER APPROVAL? Kroger and Albertsons recently announced that they plan to sell 413 stores, eight distribution centers, five private label brands, and two offices to C&S Wholesale Grocers, to achieve regulatory approval for their planned merger. This proposed deal gives C&S a retail footprint across 17 states, but it may not be enough for the merger to receive government approval. What I find most interesting about this stage of the merger is the looming specter of Albertsons’ ill-fated sale of stores to Haggen in 2014, which is coming back to haunt them. Back then, Albertson’s was divesting locations for similar reasons, amidst its merger with Safeway. The acquisition of 146 grocery store locations promoted Haggen from an insignificant chain to a major regional player. But in 2015 Haggen claimed, in a $1 billion lawsuit, that Albertsons misled it with crucial data, and “used the timing of the store transitions to run ad campaigns and promotions to steal away customers.” The lawsuit further claimed that these activities led to store closures and mass layoffs. That disaster may taint the possibility of FTC approval this time around. However, maybe they learned from their mistakes. Kroger and Albertsons assert that C&S has been an FTC-approved divestiture buyer in prior grocery transactions. What do you think should happen? #mergersandacquisitions #acquisitionsanddivestitures #strategy #successionplanning Source: “Is a 413-Store Divestiture Enough for the Kroger-Albertsons Merger?” Retail Wire, Sept. 20, 2023, by Bryan Wassel.
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Kroger and Albertsons recently announced plans to sell over 400 stores as part of a $24.6 billion merger. As the stores are sold, it is likely that they will be bought by other grocery retailers due to overlapping markets. While this might not be exciting news, it is interesting to look at the growing consolidation of the grocery industry; as companies compete for market share, it seems there is an increasing desire to engage in M&A activity. This, in turn, is likely to lead to potential competition--in this case, the Federal Trade Commission is currently reviewing these mergers to determine their potential impact. #MandA #Merger #RetailMerger
Kroger and Albertsons plan to sell over 400 stores in connection with $24.6B merger
foxbusiness.com
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🛒 Our #grocery experts are in the know! Our own #RetailStat AVP, Michael Infranco, shared insights with Grocery Dive about the revised divestiture plan in the Kroger and Albertsons Companies merger. It's a clear effort to address FTC concerns. #DataDrivenInsights #MergersAndAcquisitions #RetailAnalysis #FTCConcerns #GroceryExperts #Retail
Will Kroger and Albertsons’ revised divestiture plan satisfy the FTC?
grocerydive.com
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It’s always interesting to me when the government decides to oppose business mergers. The Federal Trade Commission has sued to prevent Kroger and Albertsons from combining. No doubt that market competition benefits consumers and the economy at large -- and FTC sited concerns that a Kroger-Albertsons tie-up would reduce competition between the two. But I wonder if a combined company might also actually benefit competition. The merged companies would command a market share of 13% in the grocery business. That’s well below the market leader Wal-Mart, which reportedly has 22% of the market. The next biggest is Costco at 7%. Both are non-union shops while Kroger and Albertsons are unionized. Would a merger help a combined Kroger-Albertsons compete against their lower-cost rivals? I hope FTC has considered all possibilities. #ftc #governmentrelations #retail #supermarkets #lobbying https://lnkd.in/gugT7GXa
US sues to block merger of grocery giants Kroger and Albertsons, saying it could push prices higher
apnews.com
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I Help Companies Build and Scale Products by Translating CEO Vision into Insightful Strategy, Meticulous execution, and Strategic commercialization | Digital Strategy and Growth Consultant | X PwC & Cognizant
Kroger-Albertsons Merger: Don’t fight the future. Washington State Attorney General Bob Ferguson sued in local court to block the proposed Kroger-Albertsons grocery merger, stating that it would significantly limit shopping options and create a virtual monopoly in the state. The merger of Washington's two largest supermarket companies could lead to higher prices and fewer consumer choices. A plan by Kroger (Fred Meyer, QFC) and Albertsons (Albertsons, Safeway, Haggen) to mitigate the merger's impacts by selling over 100 stores in Washington is deemed inadequate by Ferguson, as it would still leave Kroger with a near-monopoly in many markets. Together, K-A would control 13% of the nation's grocers, second to Walmart’s 22%, with Amazon coming in at 3%. The lawsuit seeks a permanent injunction to block the merger nationwide. The joint Kroger-Albertsons response is to remain competitive against Walmart and Amazon (Whole Foods, Amazon Fresh, online); they must combine their footprint and buying power. K-A has grown significantly over the years through mergers. Their 2022 promise was · $1B administrative savings. · $500 million into price reductions. · $1.3 billion updating Albertsons stores. · $1 billion on higher employee wages. The industry has continued to consolidate, and mergers are inevitable. Rather than another messy, should they or shouldn’t they court fight spending taxpayer money, my $.02 — bring K-A to the negotiating table. Some observations: · Draft and create a plan that lays out how consolidation will work. Involve local communities, unions, and regulators. · Commit to retail store footprints in food deserts. Work with city planners and civic organizations. · Invest some of that $1.3B to make the grocers destinations and form partnerships. · Invest some of that $1B in employee education and upskilling. Food for thought, and I’ll agree to waive my fee to work with all parties. What do you think? Fight the future, stop the merger, or bring everyone to the table? Finally, in a bit of irony, the AG’s complaint is hosted on AWS. https://lnkd.in/gHtAbiUa #KrogerAlbertsonsMerger #GroceryMonopolyConcerns #FergusonLawsuit #SupermarketCompetition #ConsumerChoiceMatters
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Exciting news in the grocery industry! The proposed merger between Kroger and Albertsons has the potential to shake things up, but let's not forget the amazing opportunities it presents for smart competitors. While these giants are busy figuring out their new strategies, other grocers can take advantage of this moment to strengthen their positions and make significant progress. Speed is key here - the faster they act, the better their chances of success. Discover how grocers can capitalize on this limited window of opportunity.
How grocers could prepare to compete with a combined Kroger-Albertsons
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New Post: Washington state sues to stop $25 billion merger of Kroger and Albertsons grocery chains, claiming it will lead to higher prices - Washington state Attorney General Bob Ferguson on Monday sued to block the proposed merger of Kroger and Albertsons, two of the nation’s largest grocery chains. In the suit filed in King County Superior Court, Ferguson argued that the $25-billion deal would harm consumers and raise prices, The Seattle Times reported. Kroger and Albertsons have more than 300 locations in the state and account for more than half of its grocery sales, according to the suit. “This merger is bad for Washington shoppers and workers,” Ferguson said in a news release Monday. “Shoppers will have fewer choices and less competition, and, without a competitive marketplace, they will pay higher prices at the grocery store.” Kroger, which owns QFC and Fred Meyer and is based in Cincinnati, is seeking to acquire Albertsons, which owns Safeway and Haggen and is based in Boise, Idaho. In a statement Monday, Kroger said it was pushing back its timeline for closing the deal due to ongoing dialogue with regulators, including state attorneys general and the Federal Trade Commission. It now anticipates the closure may occur in the first half of its fiscal year, which ends in mid-August. “While this is longer than we originally thought, we knew it was a possibility and … accounted for such potential timing,” the statement said. The company claimed the merger will bring lower prices for consumers. Ferguson’s lawsuit was endorsed by United Food & Commercial Workers, Local 3000, which represents Kroger and Albertsons employees in Washington, northeast Oregon and northern Idaho, The Seattle Times reported. “Workers, shoppers and our communities need to prevent this proposed mega-merger from taking place,” Yasmin Ashur, a union member who works in an Albertsons grocery store, said in a union statement Monday. Last year, seeking to clear a path for a merger, Kroger and Albertsons announced plans to sell more than 400 stores and other assets to C&S Wholesale Grocers, a wholesale grocery supplier, amid concerns about market dominance. Kroger and Albertsons agreed to merge in 2022. The grocery chains say they must merge to compete with Walmart, Amazon and other major companies that have stepped into the grocery business.Subscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up for free. #Washington #state #sues #stop #billion #merger #Kroger #Albertsons #grocery #chains #claiming #lead #higher #priceshttps://lnkd.in/dESKbB56
Washington state sues to stop $25 billion merger of Kroger and Albertsons grocery chains, claiming it will lead to higher prices
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Most of the focus on the proposed Kroger-Albertsons merger has centered on the potential threat to other grocers, but this merger would also create unique opportunities for astute competitors. While Kroger and Albertsons are occupied with combining parts of their businesses and planning potential synergies, other grocers should move to strengthen their competitive positioning and gain ground. The key is not only how grocers respond to the merger but how quickly they do so. The economies of scale and potential for a more responsive supply chain to meet consumers needs for Omni-channel fulfillment are certainly things to watch for. Learn how grocers should seize this limited window of opportunity:
How grocers could prepare to compete with a combined Kroger-Albertsons
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Kroger Chairman & CEO Rodney McMullen reiterated in a Q1 conference call with analysts that Kroger-Albertsons' upgraded divestiture package to C&S Wholesale Grocers for the $24.6 billion merger addresses regulators' antitrust concerns. What's more, he told analysts, the $2.9 billion divestiture deal "also positions C&S to be a strong and successful competitor,” which was a key concern of regulators regarding the initial $1.9 billion agreement with C&S. Also of note, McMullen said Kroger sees "a significant growth opportunity to deliver convenient restaurant-quality meals at an attractive value, and we are expanding our ready-to-eat offerings." With consumers concerned about high restaurant prices — and many leaning toward food-at-home purchases in response — that's a huge opportunity for grocery stores overall. https://lnkd.in/gbnK-dYi
Kroger CEO sees strong position in merger challenges
foodbusinessnews.net
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Kroger & Albertsons to sell 413 stores to C&S as well as the QFC, Mariano’s & Carrs brand names, 8 distribution centers, 2 offices & other assets in connection with the proposed Oct 14 2022. $KR $ACI #merger. Kroger will divest the Debi Lilly Design, Primo Taglio, Open Nature, ReadyMeals and Waterfront Bistro private label brands, subject to #FTC approval. Prior to the closing, Kroger may, in connection with securing FTC and other governmental clearance, require C&S to purchase up to an additional 237 stores in certain geographies. If additional stores are added to the transaction, C&S will pay to Kroger additional cash consideration. The definitive purchase agreement has customary representations and warranties and covenants of a transaction of its type. The transaction is subject to fulfillment of customary closing conditions, including clearance by the Federal Trade Commission (“FTC”), and the completion of the proposed merger. C&S will pay Kroger all-cash consideration of approximately $1.9 billion, including customary adjustments. As a result of the comprehensive divestiture plan announced with C&S, Kroger has exercised its right under the merger agreement to sell what would have been the SpinCo business to C&S. Consequently, the spin-off previously contemplated by Kroger and Albertsons Cos. is no longer a requirement under the merger agreement and will no longer be pursued by Kroger and Albertsons Cos.
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